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Samsung struggles to make global strategy amid US-China trade war
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IANS | 13 Jun, 2019
Samsung Electronics Co. has been facing a double whammy of a weak memory
chip and smartphone market, as well as uncertainties from a trade war
between the US and China, so this is the right moment for its senior
management to discuss ways to deal with the rising business challenges.
Starting
on Thursday through next week, senior executives of the South Korean
tech giant are set to gather for biannual global strategy meetings to
review performances in the first half and craft plans for the latter
half, according to company officials, Yonhap news agency reported.
The
key topic for the IT and mobile division's meeting that began earlier
in the day is how to turn around its handset business in the flattening
global smartphone market.
The world's largest smartphone maker
has grappled with slowing growth in the premium smartphone market while
losing a market share in the low-end and mid-tier segment to
cost-effective Chinese makers.
According to industry tracker
Strategy Analytics, Samsung shipped 71.8 million units of smartphones or
21.7 per cent of the total in the January-March period, with its market
share falling 8 per cent from a year earlier.
Samsung took a
step forward in its smartphones this year, expanding the company's
flagship Galaxy S10 series, including a 5G version and focusing on
budget devices, including the Galaxy M and A series.
Although the
company tried to boost demand in the high-end market with its Galaxy
Fold priced at $1,950, the tech giant's April launch schedule has been
constantly pushed back without further notice over durability issues.
Early
reviewers pointed out that the device's protective screen layer was
easy to peel off and gaps made it easy for debris to damage the foldable
display. Samsung said earlier this week it will announce the updated
schedule 'in the coming weeks,' without elaborating.
Industry
watchers speculated that the Galaxy Fold may come to the market next
month, ahead of the launch of Samsung's latest phablet, the Galaxy Note
10, widely expected in August, but the prospect remains unclear whether
the foldable handset can win consumers in the early stages.
The
task for the device solutions division will boil down to how to respond
to the US ban on Huawei Technologies and the company's ripple effect on
its mainstay memory chip business.
While some market watchers
held an optimistic view on Samsung's smartphone and net sales in the
wake of Huawei's troubles, the Korean firm has been taking a cautious
stance as the firm's value chain is tightly interwoven with the Chinese
company, also one of its major clients for memory chips.
Samsung
earns over half of its money from the US and China, leaving it more
vulnerable to prolonged trade conflicts between the world's two largest
economies.
According to a recent report by The New York Times,
the Chinese government last week summoned major tech companies,
including Samsung and other US companies, to warn of the consequences if
they follow the decision by President Donald Trump's administration to
cut off Huawei from sales of its technology.
"We are closely
monitoring the latest development related to Huawei but making a
statement in this politically sensitive time is not appropriate as it
could affect our global business," a Samsung official said, asking not
to be named.
Amid rising uncertainties, Samsung Electronics Vice
Chairman Lee Jae-yong held a meeting with five heads of the firm's major
divisions earlier this month to tell them to keep working on technology
innovations to foster new growth drivers.
"We shouldn't be
swayed by short-term opportunities and performances," Lee was quoted as
saying during the meeting in June. "Samsung should focus on securing
fundamental technologies for long-term businesses in a rapidly changing
environment."
Lee reaffirmed that the company will maintain its
earlier plan to invest 133 trillion won in the non-memory chip sector to
become the world's top industry player by 2030.
Besides the
challenge of doing business internationally, Samsung's leadership is
under growing pressure at home from the expanding prosecution
investigation into Samsung BioLogics Co., a bio-health unit accused of
accounting fraud.
On Wednesday, prosecutors pressed charges
against two vice presidents of Samsung Electronics under arrest on
allegations of masterminding the destruction of evidence related to
Samsung BioLogics, putting a burden on 51-year-old Lee, who is also
awaiting the Supreme Court's ruling on his bribery case.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
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64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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